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MARKETS LIVE BLOG:

STOCKS TRADE HIGHER; DISNEY SINKS AFTER EARNINGS

Disney's surprise streaming entertainment profit offset by weaker TV business

Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Basic Materials Names

Zacks Equity Research
·2 min read

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

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Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. ICL Group (ICL) earns a Zacks Rank #1 right now and its Most Accurate Estimate sits at $0.57 a share, just 30 days from its upcoming earnings release on July 27, 2022.

ICL Group's Earnings ESP sits at 6.21%, which, as explained above, is calculated by taking the percentage difference between the $0.57 Most Accurate Estimate and the Zacks Consensus Estimate of $0.54.

ICL is one of just a large database of Basic Materials stocks with positive ESPs. Another solid-looking stock is Lithium Americas Corp. (LAC).

Slated to report earnings on August 4, 2022, Lithium Americas Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.15 a share 38 days from its next quarterly update.

The Zacks Consensus Estimate for Lithium Americas Corp. is -$0.16, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 3.23%.

Because both stocks hold a positive Earnings ESP, ICL and LAC could potentially post earnings beats in their next reports.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ICL Group Ltd. (ICL) : Free Stock Analysis Report
 
Lithium Americas Corp. (LAC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research